Advanced Micro Devices (AMD) has announced a landmark multi-year partnership with OpenAI to supply artificial intelligence chips, in a deal expected to generate tens of billions of dollars in annual revenue for the chipmaker. The agreement also gives OpenAI the option to acquire up to 10% of AMD, marking one of the most significant collaborations yet in the fast-growing AI hardware industry.
Following the announcement, AMD’s shares surged more than 34%, hitting a one-year high of $226.71, which added roughly $80 billion to its market capitalization. The deal underscores the soaring demand for computing power across the AI sector, as companies accelerate efforts to develop systems capable of performing at or beyond human intelligence.
OpenAI looks to take 10% stake in $AMD through AI chip deal worth billions. $AMD is up over 20% in pre-market trading. https://t.co/J30Sk0Wbcc pic.twitter.com/2a79cb5BkZ— Flow God (@FL0WG0D) October 6, 2025
According to AMD, the partnership involves the deployment of hundreds of thousands of its AI chips, equivalent to six gigawatts of computing power, over several years, starting in the second half of 2026. This energy output is comparable to the needs of nearly five million U.S. households or three times the annual production of the Hoover Dam.
The rollout will begin with a one-gigawatt facility powered by AMD’s next-generation MI450 series chips, scheduled for construction next year. AMD expects to start recognizing revenue from the deal once shipments begin in 2026. Company executives project the arrangement will yield over $100 billion in new revenue over the next four years from OpenAI and related customers, with “tens of billions” expected annually.
AMD’s Executive Vice President Forrest Norrod described the deal as “transformative” for the company and the broader semiconductor industry, while Strategy Chief Mat Hein said it could attract additional clients eager to follow OpenAI’s lead. “This is a pioneer in the industry with major influence over the ecosystem,” he added.
For OpenAI, the partnership represents a crucial step toward building out its vast AI infrastructure. CEO Sam Altman said the deal would help the company secure the computing resources needed to power future models. Reports suggest OpenAI generated $4.3 billion in revenue in the first half of 2025 but spent heavily on AI research, talent, and infrastructure.
As part of the agreement, AMD has granted OpenAI a warrant to purchase up to 160 million AMD shares at $0.01 each, vested in stages based on performance milestones and future stock price targets, the final tranche unlocking if AMD’s share price reaches $600.
The deal also intensifies competition with Nvidia, the current leader in AI chips. Nvidia recently pledged a $100 billion investment to supply OpenAI with up to 10 gigawatts of AI systems. Meanwhile, other major players like Google, Amazon, and Broadcom are investing heavily in custom AI hardware as the global race for computing power accelerates.
